Canada’s Beef Industry Now Foreign Owned

The world witnessed as Cargill and Tyson plundered the Canadian cattle and beef industries after the 2003 Mad Cow debacle. By 2008, there was little meat left on the industries’ bones, so Tyson sold to Nilsson Brothers Inc., an Alberta based cattle dealer, auction house operator, and owner of a 10,000 head per week Calgary meat plant, making Nilsson Canada’s largest domestically owned meat packer.

Now after their recent beef recall, JBS, a serial recall offender itself, extends its reach Northward in buying the crippled XL Foods Canadian assets, including the Calgary and Lakeside plants, along with a 75,000 head feedlot and 6,600 acres, for $100 million, with options on the U.S. locations.

“This is an extremely troubling for Canadian food sovereignty and food security. It impacts the U.S. as well. The last thing either country needs is Brazilian based JBS, the world’s largest meat packer, sitting on the largest and cheapest exportable beef supply in the world, holding a shared Canadian monopoly with Cargill. Think of the leverage these companies will have over both Canadian and U.S. markets with their ability to manipulate and manage cattle and beef supplies across our border, let alone the dumping that could occur out of South America,” said OCM Director, Fred Stokes.

Canadian journalist, Sheri Monk, offered in her July 17th, 2008 column entitled, Sweatshop Cowboys: “Make no mistake, this is a disaster (Tyson sale to Nilsson Brothers Inc.). Now, Nilsson is doing what’s best for Nilsson and you can’t blame a businessman for making money. He picked Lakeside (Tyson) and their feedlot up for a paltry $107 million. Peanuts, given the amount of infrastructure and market share it comes with. How much market share? It’s been estimated at over 46 per cent of the cattle business in Canada. “

“Now, take those numbers and add them up for western Canada only and Nilsson’s share jumps to close to 75 per cent once you take the Cargill plant in Ontario out of the equation. No doubt, Tyson wanted out. Hell, they’re financing Nilsson to the tune of $50 million over five years just to be rid of the outfit. Yeah, it’s nice to have some Canadian ownership in the mix. But this is hardly a mix – this is a home-brewed monopoly of moonshine strength.” Sheri warned Canadian cattle producers,”You can’t have a competitive business when there is no competition. The heart and soul of the cattle business is being sold in bits and pieces right out from under your feet.”

“The rhetoric is ‘competition.’ The reality is a couple companies controlling each sector. The rhetoric is ‘free and open markets.’ The reality is a company that owns packing plants, feedlots, cattle on feed, the auction rings, and the feed mills. The rhetoric is working together as ‘a value chain.’ The reality is powerful processors and retailers capturing the profits while farmers are left with huge losses,” said Canada’s National Farmers Union Board member and cattle farmer Fred Tait in 2008.

Ironically, in view of the recent JBS purchase of Nilsson’s XL Foods, Sheri wrote in a September 7th, 2009 piece, “In the U.S., JBS Swift is responsible for a massive E.coli contamination which has made at least 20 people ill. Over 400,000 lbs. of beef has been recalled. In South America, the beef behemoth is the epicenter of a police investigation involving corruption, collusion and bribery. But that’s OK, they’re not in Canada, right? Wrong. Thanks to a totally vertically integrated market, what’s theirs really is ours.”

She ended her column with a final message to her silent Canadian cattlemen, “A poem by T.S. Eliot called The Hollow Men says it better than I ever could. Embodied in that literary work are all the plagues of humanity – hopelessness, despair, fear and apathy. It ends with:

This is the way the world ends… Not with a bang, but with a whimper. And who wants to go out like that?”

###The Organization for Competitive Markets is a non-profit fighting for fair and competitive markets